The demise of the American ‘city on the hill’

Since President Trump’s inauguration, America’s friends and enemies—categories increasingly hard to define with precision—have been buffeted by the Administration’s policy vicissitudes. Of note has been its weaponisation of tariffs not only for economic ends but in the case of countries such as Brazil, India and Canada also for overtly political ones.

This President is unmoved that a substantial part of the American commentariat—conservative and liberal—suggests that most of his actions, particularly on tariffs, are not in the interests of the United States.

Above all, Trump seeks to be a “winner”. It is a bonus when his opponents—politicians, governments or just people who get in the way—can be categorised as “losers”—an expression that in America has as pejorative a ring as “winner” has a positive one. 

Like most people, Australians focus on the actions of other countries that have a direct and visible impact on us. We worry about a ten percent tariff. We quaver about dangers to AUKUS.

A country’s security in the broad sense is premised not only on its own resilience, on its defence structures and on the direct undertakings that its allies give it.

It also is impacted by the internal health and external outlook of friends and neighbours and by the stability of the international system in which we all work.

By extension, in the specific circumstances of the United States-Australian relationship, American actions can be contrary to Australian interests if they impact adversely on Australian regional friends—and even further afield on NATO countries.

Let us look.

In recent years we have made much of the so-called Quad, the grouping of the United States, Japan, India and Australia intended as a regional structure to temper Chinese influence in our region.

President Trump has levied a 15% tariff on Japan, reportedly prompted as much by his prejudices going back to the American-Japanese trade schism of the late eighties as by economic rationality.

Bearing in mind that for Tokyo what is good for Toyota is good for Japan (the reverse is also true) one impact of American tariffs on Japan surfaced with Toyota’s recent estimate that tariffs on automobiles would entail a $US9.5 billion cut in the company’s operating profit for the year ending in March 2026.

American economic measures are hurting Japan’s pocket. They are also having an emotional impact.

Recently a former Japanese diplomat noted to this writer that with Russia to its North and North Korea and China to its West, Japan had negligible room to manoeuvre away from its dependence on the United States.

Without suggesting his view had much support in Japan, another former Japanese official suggested that it might be time for Japan to begin to repair its economic relations with China, including supporting its membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

This does not signal change in Japan’s strategic posture. But it suggests Japan is thinking about how much trust it can have in its American ally.

United States recent dealings with India have been even more fraught.

The Indians took umbrage when the United States claimed credit for a ceasefire in May between India and Pakistan following Indian air strikes against Pakistan territory in response to a terrorist attack in Kashmir.

For India, any issue involving Pakistan is neuralgic. India is also ultra-sensitive to suggestions that India-Pakistan issues should be subjected to international mediation.

Indian anger increased further when President Trump threatened a 25% tariff hike on India (on top of 25% already imposed) because of India’s longstanding practice of purchasing oil from Russia in defiance of United States sanctions over Ukraine.

These developments also need to be read against an improvement in India’s relations with China since last October. This shift stemmed from agreement about management of border tensions in the Himalayas. There has also been a meeting in Russia between Chinese Premier Xi Jinping and Indian Prime Minister Modi. Modi is scheduled to visit China later this month

India is not about to switch horses from America to China. China and India have been geopolitical rivals since they fought a border war in 1962. But Modi’s relationship with Trump is a far cry from what it was a few months ago. And his dealings with Xi are in better shape.

In Southeast Asia, where the contest for influence between the United States and China is most pivotal, the United States has imposed tariffs of between 19% and 40% on nine out of the ten ASEAN countries.

Even Taiwan, the survival of which depends on United States support, has been subjected to a tariff of 20%. High level defence talks have been postponed and Taiwan’s President, Lai Ching-te, was recently denied transit rights in New York enroute to Central American countries with which Taiwan has diplomatic relations. The betting is that these United States actions relate to its imminent trade talks with China.

And there is the impact on the rest of the world of Trump’s actions.

The Harvard professor, the late Joseph Nye, postulated that America’s global pre-eminence at the end of the twentieth century was not just attributable to military and economic power but to its capacity to persuade, based on its principles, reputation and credibility. He coined the term soft power to describe that capacity.

Shortly before he died this year, Nye argued that with Trump’s second coming, America’s soft power would decline dramatically.

This is happening—possibly irreversibly. For example, America’s support for Israeli policies in Gaza has put it at odds not only with the Global South but with the rest of the West. The elimination of America’s aid program suggests that the Administration’s obsession with the accretion of wealth outweighs other policy impulses. And then there are Trump’s domestic policies: on immigration, education, health and so on.

Over the past generation Australia has channelled too little of its foreign policy energy into the region and too much into our relations with the United States. However, we have generally been able to claim that Western principles, as epitomised by the United States, were a decent foundation upon which to premise our external policies. The weakening of America’s ethos weakens the West’s and Australia’s ethos.

One of America’s early puritan settlers, John Winthrop, described Boston as “the city upon a hill, the eyes of all people are upon us.” The phrase later became associated more widely with the positive aspects of American exceptionalism.

We are poorer without the city on a hill. No winners, all losers.

John McCarthy AO is Senior Adviser at Asialink and former Australian Ambassador to the US and several Asian countries.

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